March 7 (Reuters) - Britain's largest coal mine will close
permanently and most of its 650 workers will lose their jobs due
to an underground fire that continues to burn "ferociously" two
weeks after it started, mine owner Coalfield Resources
said.

The Daw Mill Colliery in Warwickshire has been closed since
Feb. 22, when a blaze described by Coalfield as Britain's worst
coal mine fire in 30 years began. The company had said that the
closure was likely to become permanent.

"A small, core team will remain on site to safely secure the
mine over the coming months," UK Coal, the mining division of
Coalfield Resources, said on Thursday.

The closure is the second recent blow to a British coal
mining industry battling cheap imports and greener government
policy. Hargreaves Services said in December it would
close its century-old Maltby pit and cut 540 jobs.

Most deep coal mines closed in Britain after a 1984 miners'
strike, shrinking what had been an industry employing several
hundred thousand workers to a headcount of fewer than 6,000
workers by 2011.

UK Coal, Britain's largest coal miner, employs almost half
of these miners. Its six surface pits and three deep mines,
including Daw Mill, account for about 40 percent of Britain's
coal production.

UK Coal avoided a debt default and the closure of its
operations after completing a major restructuring in December,
which separated its coal mining operations and property assets.

The company had already been cutting costs at Daw Mill.
Ninety-six employees lost their jobs in November.

UK Coal Chief Executive Kevin McCullough told Reuters in an
interview on March 1 that the company might be able to redeploy
some of the 650 Daw Mill miners to its other collieries.

In its statement on Thursday, Coalfield said discussions
were continuing with the government "with a view to helping the
company manage the closure of Daw Mill and seeking a way forward
for the remaining mines".

The Daw Mill colliery, which had production capacity of
around 1.5 million tonnes a year, supplies German-owned utility
E.ON UK's Ratcliffe coal-fired power station.

Supplies to E.ON had not been interrupted as the company was
able to work through its coal stockpile on the surface,
McCullough said in the March 1 interview.